Settlement Escrow

Question 1

A title agent’s main fiduciary responsibility is to the:

A. Buyer
B. Seller
C. Lender
D. Title Insurer (Underwriter)

Answer 1

D. Title Insurer (Underwriter)

Question 2

A true escrow is:

A. Revocable
B. Reversible
C. Irrevocable
D. Irresponsible

Answer 2

C. Irrevocable

Question 3

The minimum number of people required to establish a simple escrow is _____.

A. 1
B. 2
C. 3
D. 4

Answer 3

C. 3

Question 4

Who is NOT a party to an Escrow Holdback Agreement?

A. Buyer
B. Title Agent
C. Seller
D. Lender

Answer 4

D. Lender

Question 5

Although Florida does not currently require that notarial journals be maintained, the Governor’s Reference Manual for Notaries says it is an option notaries may want to consider. Notarial journal entries generally include the following EXCEPT:

A. Date, time, and type of notarial act
B. Type, title, or description of the document(s) being notarized
C. Signature, printed name, and address of person signing, including description of satisfactory ID
D. Photocopy of each document signed, witnessed, and notarized

Answer 5

D. Photocopy of each document signed, witnessed, and notarized

Question 6

While it is essential for notaries to perform all required duties fully and to the best of their ability, it is essential that they do not overstep their commissioned authority. Notaries are state-commissioned public officials (F.S. Chapter 117) empowered to perform specified notarial acts, within the boundaries of the state in which they are commissioned. What would NOT be included among authorized acts?

A. Taking acknowledgments
B. Administering oaths and affirmations
C. Conducting closings
D. Certifying copies of documents

Answer 6

C. Conducting closings

Question 7

One of the main recommendations in the _____ is directed at state insurance regulators, who are encouraged to closely monitor activities of title agents and title agencies.

A. 2007 GAO Report
B. 2008 RESPA Final Rule
C. 2010 Dodd-Frank Act
D. 2012 Integrative TILA-RESPA Final Rule

Answer 7

A. 2007 GAO Report

Question 8

Which of the following would NOT be included as part of the post-closing process?

A. Ordering the survey
B. Recording the documents
C. Disbursing the file
D. Transmitting the closed loan package to lender

Answer 8

A. Ordering the survey

Question 9

On purchase/sale/finance transactions, the settlement agent must comply with all of the following EXCEPT:

A. Real estate contract
B. Loan closing instructions
C. Title insurance commitment
D. Prior owner’s title insurance policy

Answer 9

D. Prior owner’s title insurance policy

Question 10

When a witness signing is conducted by an independent notary, who is responsible for conducting the closing?

A. Title (closing) agent
B. Real estate broker
C. Independent notary
D. Loan originator

Answer 10

A. Title (closing) agent

Question 11

Title insurance companies/agencies in Florida are authorized to prepare:

A. Sales contracts
B. Legal documents incident to the issuance of title insurance
C. Any legal documents incident to the marketing of services
D. Lender’s truth-in-lending form

Answer 11

B. Legal documents incident to the issuance of title insurance

Question 12

A Title Agent has a fiduciary duty to the ____ regarding loan closing instructions and loan funding.

A. Buyer/Borrower
B. Mortgage Lender
C. Seller
D. Realtor

Answer 12

B. Mortgage Lender

Question 13

Which of the following items would NOT be a pre-closing task?

A. Receipting in earnest money deposit
B. Ordering the title work
C. Ordering loan / lien payoffs
D. Recording the note and mortgage

Answer 13

D. Recording the note and mortgage

Question 14

A title agent’s main fiduciary responsibility is to the:

A. Buyer
B. Seller
C. Lender
D. Title Insurer (Underwriter)

Answer 14

D. Title Insurer (Underwriter)

Question 15

A title agency acting in the capacity of escrow agent is responsible for:

A. Preparing documents
B. Rendering judgment
C. Remanding custody of papers
D. Retaining documents and funds until all conditions are met

Answer 15

D. Retaining documents and funds until all conditions are met

Question 16

A Florida title agency must maintain a surety bond in the minimum amount of $_____, payable to the title insurer(s) appointing the agency.

A. $25,000
B. $35,000
C. $50,000
D. $250,000

Answer 16

B. $35,000

Question 17

When transmitting a closed loan package to a lender, a/an _____ should always be included.

A. Signed escrow agreement
B. Satisfaction of mortgage
C. Transmittal letter
D. Owner’s title insurance policy

Answer 17

C. Transmittal letter

Question 18

In Florida, who may NOT prepare real estate contracts?

A. Real estate brokers and agents
B. Attorneys
C. Buyers and sellers
D. Title agents

Answer 18

D. Title agents

Question 19

A Title Agent’s main fiduciary duty is to the:

A. Title Insurer
B. Buyer and Seller
C. Realtor
D. Assignee Lender

Answer 19

A. Title Insurer

Question 20

The closing agent certification required for FHA loans is regulated under the:

A. Budgetary Reconciliation Act
B. Federal False Claims Act
C. Housing and Urban Development Act
D. Foreign Real Property Tax Act

Answer 20

B. Federal False Claims Act

Question 21

Which of the following is NOT a main transaction-governing document on a Purchase/Sale/Finance transaction?

A. Real Estate Contract
B. Loan Closing Instructions
C. Title Insurance Commitment
D. Lender’s Loan Policy

Answer 21

D. Lender’s Loan Policy

Question 22

Lender reserves for funds escrowed at closing do NOT include:

A. Taxes
B. HOA fees
C. Hazard insurance
D. Mortgage insurance

Answer 22

B. HOA fees

Question 23

Which of the following would be considered the unauthorized practice of law if performed by a non-attorney title agent?

A. Completing forms such as the title and closing affidavits
B. Selecting, drafting, or explaining a legal instrument for a transacting party
C. Typing form title commitments, policies, and endorsements
D. Completing form documents and instruments selected by and per instructions of the parties to the transaction

Answer 23

B. Selecting, drafting, or explaining a legal instrument for a transacting party

Question 24

Who may NOT prepare real estate contracts?

A. Attorneys
B. Real Estate Agents
C. Title Agents
D. Buyers and Sellers

Answer 24

C. Title Agents

Question 25

Regarding homeowners insurance, at closing how many months does RESPA permit a lender to collect as a cushion toward escrowing funds for future premium payment? A. 2 B. 6 C. 12 D. 14

Answer 25

A. 2

Question 26

Where a title commitment or policy is issued, the _____ should be deleted at the time closing funds are disbursed. Title insurers are required to insure against the possible existence of adverse matters or defects in the title which are recorded between the effective date of commitment and date of recording of the vesting instrument; except as to matters of which the insured has knowledge. A. Survey exception B. Gap exception C. Effective date D. Policy exclusions

Answer 26

B. Gap exception

Question 27

Which of the following would be considered the unauthorized practice of law if performed by a non-attorney title agent? A. Explaining the meaning of legal terms used in taking title to property B. Performing notarial duties in line with state commission parameters C. Determining that all closing documents conform to the parties’ contract requirements D. Ascertaining that the lender’s instructions have been satisfied

Answer 27

A. Explaining the meaning of legal terms used in taking title to property

Question 28

The document evidencing the VA guarantee of a mortgage loan on behalf of a veteran borrower is called: A. Certificate of completion B. Certificate of eligibility C. Certificate of commitment D. Certificate of domestication

Answer 28

B. Certificate of eligibility

Question 29

On a 30-year mortgage with first payment date of January 1, 2011, final payment is due: A. December 1, 2041 B. December 31, 2041 C. December 1, 2040 D. December 31, 2040

Answer 29

C. December 1, 2040

Question 30

With respect to escrow funds, Title Agents and Title Insurers may NOT do any of the following EXCEPT ____ such funds. A. Hold B. Encumber C. Use D. Endanger

Answer 30

A. Hold

Question 31

Who is NOT required to maintain and submit information, including but not limited to revenue, loss, and expense data, to assist state regulators in the analysis of title insurance premium rates, title search costs, and the condition of the title insurance industry in Florida? A. Title insurers B. Title insurers’ direct/retail operations C. Title insurance agencies D. Individual title (closing) agents

Answer 31

D. Individual title (closing) agents